Foreclosure drop not all good news

By Bloomberg News
February 11, 2011

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Foreclosure filings fell 17 percent in January from a year earlier, the fourth straight month of declines, RealtyTrac Inc. said.

A total of 261,333 US properties received notices of default, auction, or seizure. One in 497 households got a notice. It was the third consecutive month with fewer than 300,000 filings, following 20 months above that.

“Unfortunately, this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork, and formulating legal arguments related to accusations of improper foreclosure processing,’’ said James Saccacio, RealtyTrac’s chief.

All 50 states are investigating the way lenders and loan servicers handle foreclosures after claims some were marred by faulty documentation or by “robo-signing,’’ the mass processing of paperwork without proper verification.